Shopify Inc. is undoubtedly one of the most popular stocks among American and Canadian investors. The price of Shopify stock grew at an average pace of almost 100% per year from 2016 to 2021. With compound interest, that translates to a nearly 3,000% gain in just five years for investors.
After Shopify’s significant selloff over the last three months, though, you may be wondering if the opportunity to earn a tonne of growth with Shopify stock is over. However, despite this selloff, Shopify stock is still a dominant company in an industry that offers tonnes of opportunities to grow.
At roughly $860 a share, the price of Shopify stock is currently more than 60% off its all-time high. In addition, even after analysts have now put out new estimates and target prices, Shopify looks considerably undervalued.
The average target price for Shopify stock sits at more than $1,300 a share, a roughly 50% premium to today’s price. In addition, the lowest target price is still more than $1,000.
Looking at valuation metrics, it also seems to be the case that Shopify stock is undervalued at the current price. Its current forward price-to-sales ratio of just 14 times is the cheapest it’s been since February of 2019 – a year before the pandemic began to impact markets.